House price growth will come to a halt next year as the number of transactions reduces, according to the RICS forecast for 2018.
However, there will be regional variations with some regions offsetting declines in London and the South East.
RICS says the big theme of 2018 is again expected to be the overriding issue of supply with stock on estate agents books close to all time lows.
It says there are no signs as yet that 2018 will see a turnaround in supply across the second hand market.
Sales are unlikely to top 1.2 million in 2018 “with political and economic uncertainty proving a hindrance as well as the lack of stock, stretched affordability, tax changes and interest rate rises."
RICS says there may be some increase in first time buyer activity following stamp duty changes announced on the Budget; however, “with higher prices offsetting the tax saving, such a small change will have minimal impact in its goal of lifting home ownership rates.”
“Following a pretty lacklustre finish to 2017, the indications are that momentum across the housing market will be lacking as 2018 gets underway. With several of the forces currently weighing on activity set to persist over the near term, it’s difficult to envisage a material step-up in impetus during the next 12 months” explains Tarrant Parsons, RICS economist.
“A real lack of stock coming onto the market remains one of the biggest challenges, while affordability constraints are increasingly curbing demand in some parts. Given these dynamics, price growth may fade to produce a virtually flat outturn for 2018.”